by Rob Paterson
March 9, 2010 at 7:25 am
· Filed under Connected Enterprise, Control, Culture
5 reasons why your company should be distributed
I’ve noticed a new trend in Silicon Valley. More and more startups are beginning life as distributed companies, and investors and partners are starting to accept it as normal. Our company Automattic is distributed, and I’m ready to sing the praises of running a business in this way. BTW, I thinkdistributed (“evenly spread throughout an area”) is a better description than the more commonly used virtual (“nearly real or simulated to be real”) for a company that has people working from all over the place instead of a centralized office. In Automattic’s case, we currently have over 50 employees spread across 12 US states and 10 countries.
Here are my top 5 reasons why you should consider the distributed model for your company:
via toni.org
I think that this is indeed the future – the full text follows here
As with all good network designs – most of the direct and indirect costs of the organization go away.
The capital costs are shed and are taken up by the nodes. People work from their place. With their gear. Huge expenses off the table. Huge potential to have the best gear for the staff.
Most of those interruptions go away – who can get any work done at the office these days?
Most of those silly meetings go away.
With NO Commute – so they get hours of time back a day. Let’s say 2 hours a day. 10 hours a week. 40 hours a month. (That’s a working week). 12 weeks a year! That is a lot of dentist visits, plumber visits, time with kids and spouse, time to nap, time to do whatever. And all this time was pulled out of the air as a result of not commuting.
Then of course there are the direct costs of commuting – the car, the transport. It costs $9,000 a year to run a car fully costed. How about coffee and lunch? What do you spend today? $5.0 – $20 a day. That is $1,000 – $4,000 a year for coffee and lunch! How about clothes? I used to buy 2 suits a year as a man. Women can’t get away with that. How much does going to work cost you in clothes? $2,000 – $5,000.
Daycare – well you might still want to send your kid off to daycare but now you might be able to do this locally and walk there. You will not have that pressure at the end of the day to juggle that project and getting to daycare on time. If your child is sick, you have options. And with all the money you have saved on the other things, you can afford a good one.
They live where they want. Huge choice given back. Not only can you choose what part of town, but what town or even country.
Then firm can also hire from a market of 6 billion versus from the local pool – the full talent pool of the planet is open to you.
The costs of travel to meet and hang out now and then are tiny compared to what is spent on a conventional organization.
The communication tools that connect you all now are all but free as well. The Skype offices have big screens that are ON all the time – so you can look up and call out to a colleague in another city as if she was in the next room – for free!
So why not your office? Well if your organization is all about control, then this will never happen. if your organization is all about process and not results, this will never happen. If your organization hires people who don’t have the skills to deliver, this will never happen. If your organization is like this – why are you still there?
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Here, Here!
When I started building my staff, I didn’t have the money for an office. I still don’t. But I needed people. So, they all work from home.
The key to success is, firstly, stepping outside one’s own preconceived notions. The idea of staff meetings and regular work hours is the first thing to go. And the first thing they need is your trust.
Employees who are left to their own devices, with a set of clear expectations and good directions, will exceed your expectations every time. I — and others — have been amazed at the quality of our staff and in my opinion, it is about letting them decide how much work they will do when not me dictating.
Personally, I think people want to succeed so if you let them, they will. On the flip side, if they are told exactly what to do, when and checked up on they will do only that.
I never thought of totting up the savings of not commuting since I began homeworking last August. I know I feel so much healthier since I go for a brish 40 minute walk on the days I don’t do the same time shooting hoops at the local basketball court. I don’t know if figures are available but I no longer take sick leave, since I no longer get sick. That has to be a consideration for companies thinking about letting their staff work from home.
I just don’t see a downside. I hear people moan about missing the people in the office, but most of the time people are in meetings or tapping behind their screens. When I speak to colleagues from home via email, IM, Google Wave, Twitter or the phone, I get all their attention, not just grunts between tappings on the keyboard.
The distributed workforce is a growing phenomena. We’ll one day look back and marvel at all the wasted time, energy and money spent commuting and paying for expensive office space. Rob, great article
[Re-submitted as original was lost in a server upgrade)
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AhmadAugust 10th, 2010 at 5:23 pm |
I think i need to forward this article to all Business Owners i know.
Thank You
Ahmad
RTM Group
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ffblogMarch 9th, 2010 at 7:25 am |
New: : HR – The Company of the Future – Automattic http://www.fastforwardblog.com/2010/03/09/hr-the-company-of-the-future-automattic/
This comment was originally posted on Twitter
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SEOSpyMarch 9th, 2010 at 7:27 am |
RT @ffblog: HR – The Company of the Future – Automattic http://bit.ly/doNdhI
This comment was originally posted on Twitter
5 reasons why your company should be distributed http://u.nu/4mif7 I used to spend 8 hrs/week commuting
This comment was originally posted on Twitter
While I agree, it takes a mature worker to b able to do it. RT @hjarche: 5 reasons why your company should be distributed http://u.nu/4mif7
This comment was originally posted on Twitter
HR – The Company of the Future – Automattic: FastForward (blog)
BTW, I thinkdistributed (“evenly spread throughout… http://bit.ly/a1gjUS
This comment was originally posted on Twitter
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naroMarch 9th, 2010 at 8:17 am |
HR – The Company of the Future – Automattic http://bit.ly/dtx9zf
This comment was originally posted on Twitter
5 reasons why your company should be distributed http://tinyurl.com/y86ynxs
This comment was originally posted on Twitter
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MattMarch 9th, 2010 at 11:06 am |
Gotcha. That’s sensible. Thanks for the article.
This comment was originally posted on toni.org
RT @mfauscette: 5 reasons why your company should be distributed http://tinyurl.com/y86ynxs
This comment was originally posted on Twitter
RT @hjarche: 5 reasons why your company should be distributed http://u.nu/4mif7 I used to spend 8 hrs/week commuting
This comment was originally posted on Twitter
The FASTForward Blog » HR – The Company of the Future – Automattic … http://bit.ly/ayT8EE
This comment was originally posted on Twitter
The FASTForward Blog » HR – The Company of the Future – Automattic … http://bit.ly/ayT8EE
This comment was originally posted on Twitter
The FASTForward Blog » HR – The Company of the Future – Automattic … http://bit.ly/ayT8EE
This comment was originally posted on Twitter
The FASTForward Blog » HR – The Company of the Future – Automattic … http://bit.ly/ayT8EE
This comment was originally posted on Twitter
Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
Wow, we really like it too. RT @ducttape: Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
This is super interesting. I #love the future! RT @ducttape: Like this: HR ? The Company of the Future ? Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
RT @ducttape: Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
RT @ducttape: Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
employers, please read this. RT @ducttape: Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
The tools are there & it’s great for SMBs: RT @ducttape: Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r (via @ducttape)
This comment was originally posted on Twitter
RT @ducttape: Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
RT @ducttape: Like this: HR – The Company of the Future – Automattic http://bit.ly/9kV25r
This comment was originally posted on Twitter
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ChrisMarch 9th, 2010 at 5:35 pm |
Great write-up Toni! Very cool model! I could imagine there are some additional benefits…for example, having folks in various locales may allow for a chance to be closer to the customer. Silicon Valley is sometimes accused of having a bit for a bubble mentality and having folks out and all over the globe may give you better access and a better understanding of your customers and should allow you to better tap into interesting regional/int’l trends and understand local markets better.
This comment was originally posted on toni.org
good post. a distributed company give more chance to people. http://poweroforthodoxy.wordpress.com/
This comment was originally posted on toni.org
fast forward.. HR – The Company of the Future – Automattic – 5 reasons why your company should be distributed I’ve… http://ow.ly/16Leg8
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I started working at a distributed company when I was hired at MySQL. It was a great draw, and a great reason for great people to work there. In the transition to Sun, the distributed work environment continued. Now I work for Gear6, and I still work this way. I cannot imagine wanting to work in a cubicle or even a corporate office, ever again.
Some things to note about distributed work. You have to hire good self-motivated people. You have to anyway, but the reasons become stark here. Also, do not think that being distributed means you can just save money by not having office space. The money you don’t spend on office, you have to spent on travel, because every team needs to meet face to face at least once a year, and everyone in the company should meet at least once a year.
This comment was originally posted on toni.org
Find a smarter VC.
VCs that insist that they need to be able to manage a company by physically visiting are making the same mistake that old school managers make when they say that they have to watch their staff work to make sure they are working.
If your company doesnt perform or you staff wont work if you are not watching over people’s shoulders, then it won’t excell even if you are doing so.
This comment was originally posted on toni.org
Very interesting read. I think a lot of these benefits and techniques can be applied to distributed teams within larger organizations. Of course, not everything applies, and there is not as much flexibility as in an entirely distributed startup. That said, as someone working in a large corporation which is slowly moving towards a more distributed model, I can see things like better communication tools and in-person week-long events having a very positive impact.
This comment was originally posted on toni.org
http://www.fastforwardblog.com/2010/03/09/hr-the-company-of-the-future-automattic/
This comment was originally posted on Twitter
The FASTForward Blog » HR – The Company of the Future – Automattic …: So, they all work from home. The key… http://tinyurl.com/ylrzcwk
This comment was originally posted on Twitter
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loicMarch 10th, 2010 at 12:10 am |
HR – The Company of the Future – Automattic http://ping.fm/7PrNQ
This comment was originally posted on Twitter
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ben_rMarch 10th, 2010 at 12:11 am |
RT @loic: HR – The Company of the Future – Automattic http://ping.fm/7PrNQ
This comment was originally posted on Twitter
Great read – agree w most: HR – The Company of the Future – Automattic http://bit.ly/amA9W0
This comment was originally posted on Twitter
Just because you’re virtual doesn’t mean you’re effective: http://bit.ly/8I2h3V RT @loic: The Company of the Future http://ping.fm/7PrNQ
This comment was originally posted on Twitter
The company of the future is distributed (not virtual): http://icio.us/50vdrc
This comment was originally posted on Twitter
HR – The company of the Future – Automatic – http://ping.fm/7PrNQ by Rob Paterson
This comment was originally posted on Twitter
The Company of the Future – Automattic: http://ow.ly/1goOW
This comment was originally posted on Twitter
The FASTForward Blog » HR – The Company of the Future – Automattic: Enterprise 2.0 Blog: News, Coverage, and Commentary http://ow.ly/1gqLk
This comment was originally posted on Twitter
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actwebMarch 10th, 2010 at 3:31 am |
The FASTForward Blog » HR – The Company of the Future – Automattic: Enterprise 2.0 Blog: News, Coverage, and Commentary http://ow.ly/1gqLd
This comment was originally posted on Twitter
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YogeshMarch 10th, 2010 at 7:15 am |
We are a group of 10 working distributed on HR, IT, and Power sectors in India. We all work from our homes or where ever we are. This is really excellent working like this and reduces your lot of infrstructure cost. Nice to see that people have achieved altitude of success through this.
we are more detemined now.
This comment was originally posted on toni.org
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NumptyMarch 10th, 2010 at 9:01 am |
I’ve worked this way for ten years, and it’s certainly not a bed of roses. For example, those “hallway discussions” that “nobody misses” don’t tend to happen at all, or at least not in nearly as productive a fashion, and that’s a very bad thing.
This comment was originally posted on toni.org
+1 We went 100% @ home engineeing from the beginning in 2007 @ Sonian and haven’t looked back. It’s awesome. We have adapted our workflow for work-at-home and it’s working great.
This comment was originally posted on toni.org
Great write up. I am just ecstatic that all the tools are coming together so companies can work with talent wherever it is. I for one am building a technical team in Latin America and am sure the opportunity will arise where our team will become part of a multi-country startup.
This comment was originally posted on toni.org
The Company of the Future http://bit.ly/dnuwwc
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seconded.
This comment was originally posted on FriendFeed
I worked in distributed teams for many years. Not bad if you don’t mind lots of phone calls. But recently, I’ve been a part of a small local team and it’s so much more efficient. Decisions take minutes rather than hours or days and productivity is to much higher. In summary, you can survive in a distributed team if you have to, but you wouldn’t design an organisation that way if you care about programmer productivity.
This comment was originally posted on toni.org
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ToniMarch 10th, 2010 at 1:29 pm |
I agree that phone calls are inefficient for distributed teams. Using something more immediate and scalable like IRC or chat is crucial.
This comment was originally posted on toni.org
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NumptyMarch 10th, 2010 at 1:37 pm |
IRC and chat programs are very inefficient compared to face-to-face (or voice-to-voice) chat, though, and they really *aren’t* scaleable– as soon as more than two or three people try to talk together, you spend half your time typing over each other and subsequently trying to figure out who’s talking to whom about what, and the other half in long periods of unproductive Bergmanesque silence. Been there, done that (and still do, most days).
This comment was originally posted on toni.org
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LenZMarch 10th, 2010 at 5:37 pm |
Great post! I agree to all of your points. I’ve been working in this environment for almost 8 years now (I joined MySQL in 2002). The regular face-to-face meetings are key, especially for new employees. Back when I joined the company, I was invited to attend a staff meeting in St. Petersburg in my first week, to meet all of the ~40 employees back then. These personal contacts really helped me a lot to find my way around and get started and they are still valuable nowadays.
The distributed work model also works best if you grow with it from the very beginning and everybody is in the same situation. It’s much harder to move to this model when a company already has an office and established procedures and practices. It’s easy for the few remote workers to fall off the radar screen and be out of the loop – discussions and decisions that have not been documented or communicated, etc.
Having IRC logs and mailing list archives is nice, but they are no replacement for proper documentation (e.g. meeting summaries). A Wiki turned out to be an excellent tool for that, but it needs to be properly maintained, structured and kept up to date.
Work/life balance is another interesting topic. It’s easy to fall into one of the extremes of not working at all (goofing off) and working too much. Having a social background (e.g. a family or partner, hoobies) is a very important aspect for every employee. It’s easy to burn out or fall into a black hole when you’re on your own for too long.
I’ve been giving talk about this topic at some events last year – here are the slides and videos:
http://www.slideshare.net/LenzGr/working-for-a-virtual-company
http://ftp.stw-bonn.de/mirror/froscon/2009/prerelease_please_do_not_redistribute/sa/hs12/2009_08_22_-_HS12_-_EN_-_Working_for_a_Virtual_Company.ogg
http://de.sevenload.com/sendungen/next-conference/folgen/loQ5kJB-next09-Working-for-virtual-Company
This comment was originally posted on toni.org
‘Distributed’ co. is better term than ‘virtual’ co. (’nearly real or simulated to be real’) Thx Rob Paterson http://tinyurl.com/y96odpl
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JeremyMarch 11th, 2010 at 1:39 am |
So how does this work for people who have family commitments and can’t commit to a week away? That’s a lot of great people who you’re immediately discounting.
This comment was originally posted on toni.org
Great post. We’re just in the process of implementing a distributed model for our design company, wow creative. We also set odbody.com up like that. There is a word of warning and that is it’s a lot easier to start a company and develop the culture from the beginning than it is to change into this model. Existing staff can feel they are missing out on the team feel and they have to be prepared to embrace new technologies. All that being said I think the benefits far out way the negatives and it’s such a progressive way to work – I’m much more creative not stuck in the same 4walls.
This comment was originally posted on toni.org
At MySQL, we’ve always used IRC chat as our ‘virtual office/hallway’ and this seems to have worked well for us. It’s a tried-and-true technology that provides excellent real-time group and 1-on-1 interaction. And unlike the case with some other collaborative apps, I can’t think of any operating platform that doesn’t have (at least) several IRC clients to choose from.
Most teams have their own channels on our dedicated IRC server; we also have a number of ad-hoc channels for specific topics/projects. And since it’s exclusive to employees, you don’t have to worry much about administrative overhead, ‘Can I have ops?’, etc. For MySQL Support staff, presence on our IRC is required during core working hours; for others, it’s optional but expected. Many of us stay connected even when not working; this makes it easy to catch up on what your team-mates were discussing while you were away.
This comment was originally posted on toni.org
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ToniMarch 11th, 2010 at 9:58 am |
We make exceptions for family commitments, and we pick the dates for our meetups well ahead of time so people can plan for them. In general, I think it’s OK to ask for 2 weeks of company travel when the other 50 weeks are totally open.
This comment was originally posted on toni.org
Company of the future .. distributed rather than virtual .. @robpatrob on FF blog … http://bit.ly/aeAydG < telepresence will evolve a lot
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RT @jonhusband: Company of the future .. distributed rather than virtual .. @robpatrob on FF blog … http://bit.ly/aeAydG
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alevinMarch 11th, 2010 at 11:06 am |
RT @jonhusband: Company of the future .. distributed rather than virtual .. @robpatrob on FF blog … http://bit.ly/aeAydG < telepres …
This comment was originally posted on Twitter
RT @jonhusband Company of the future -distributed rather than virtual .. @robpatrob.. http://bit.ly/aeAydG < telepresence will evolve a lot
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AlJakobMarch 11th, 2010 at 12:49 pm |
RT @jonhusband Company of the future .. distributed rather than virtual. http://bit.ly/aeAydG TÜ halduspoole koondamine – kas analoogia?
This comment was originally posted on Twitter
And you can overlap on-call coverage across continents, reducing the need to page anyone out of bed.
-d
This comment was originally posted on toni.org
“The Company of the Future” –> http://bit.ly/bIV1Eb (Huge proponent of this approach!)
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Enjoyed your writing but the background makes it very hard to focus.
This comment was originally posted on toni.org
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JohnMarch 11th, 2010 at 6:56 pm |
Is there anywhere that lists distributed companies that are hiring? This type job would really fit my current situation.
This comment was originally posted on toni.org
very write article. I first learned about Automattic’s distributed office when I visited Pier 38 and fell in love with the idea. I am implementing this idea for my accounting business right now so we’ll see how this work out (so far, 2 people in LA, 2 in Detroit and 1 in Davis). I’m very excited.
This comment was originally posted on toni.org
Toni, great post and compelling. You are inspiring me to give it a try. I have had problems with home based partners. Communication, missed deadlines, stuff that happens in an office, but you are less inclined to think the “partner” was job hunting or laying on North Avenue Beach.
I see you have a huge thread, so if you can’t reply, I get it. What is the key to keeping the employee motivated each and every day? It is obvious with open source and wordpress, your community is the best. Passionate. Can this translate to online marketers, that have a different job description and skill set?
No one likes to talk money, but it is significant. How do you pay? I have been a victim of employees doing freelance, on Arcade time.
What are the benefits that you offer, or would offer that keep employees loyal?
Thanks a ton, John
This comment was originally posted on toni.org
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ToniMarch 14th, 2010 at 10:28 am |
Hi John. Having a lot of control over your personal work environment is they key difference in this model. So it’s important to find people who are turned on by that. We look for people who are very self-directed. They might have done consulting before and liked it a lot. They can take a small amount of information and run with it. They communicate online easily and concisely. By using tools like P2 and IRC you can tell pretty quickly if someone is not participating (and might be freelancing or goofing off). Depending on the job there are other measurable indicators of how engaged someone is, like code check ins for software developers, or answered tickets for customer support people. Those are some of the patterns we look for. Having a way to work together on a trial or pilot project first is very useful to see if the distributed setup is working for someone and if their passion for the job comes through. As far as salary and benefits, I think they are the same in a distributed model as in a traditional one. Personally, I think top of market salaries, stock options (or some form of company ownership), and health insurance (US only because of the weird health insurance setup) are motivators. The rest (bonuses, 401ks, company gyms, etc) are only marginally useful (I’d rather pay someone extra and let them make their own benefits decisions).
This comment was originally posted on toni.org
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leomeeMarch 14th, 2010 at 8:23 pm |
“New Generation. New Rules. New Offices” 
5 reasons why your company should be distributed http://bit.ly/azqOw0
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LenZMarch 15th, 2010 at 6:37 am |
Somehow the trackback from my blog to this article did not work. I wrote a followup with additional comments on my blog about this topic:
Thoughts about working in a distributed organization
http://lenzg.net/archives/294-Thoughts-about-working-in-a-distributed-organization.html
Let me know what you think!
This comment was originally posted on toni.org
Et une suite, des considérations économiques de la démarche d’entreprise distribuée : réduction de coûts http://bit.ly/bjE2U8 #yam
This comment was originally posted on Twitter
Hi Toni, did you know that ADP does international payroll??
http://www.adpstreamline.com/international-multinational-payroll?knc=streamline&gclid=CO6YtNHSw6ACFSFciAodWGQ-aQ
This comment was originally posted on toni.org
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FloMarch 26th, 2010 at 8:14 am |
Great idea, however a bit too avant-garde for Europe I should think, and especially Britain where I work at the moment.
And you haven’t really answered David Coveney’s post (3:16 pm on March 9, 2010 )
——————–
You’re dealing here with ten different legislatures, each with completely different employment rights, benefits, tax regimes and so on. If you hire your staff as self-employed or as contracting companies, then that’s not so bad, because the laws are a lot simpler… but if they’re actual employees then it gets tough.
Take one example – maternity/paternity leave. In some countries you can take a year as the father, in others just a couple of weeks, and others none at all. How do you reconcile that into your procedures?
What about the right to a sabbatical for French staff, or 401K contributions in the US… it goes on and on.
————————-
And holidays allowance? Is it OK for employees in one country to have more than those located elswhere? How can you keep the policy there as ‘minimum’?
or pension benefits? or redundancy packages?? …. Indeed the list goes on.
How do you solve this?
(Don’t get me wrong, I am not negative, I’d just like to know!)
This comment was originally posted on toni.org
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